The City of Martinsville may be on the hook for an $800,000 loan extended to the Integrative Centers for Science and Medicine (ICSM) by the Tobacco Region Revitalization Commission. The tobacco commission gave ICSM the money to help start the College of Henricopolis School of Medicine in the economically beleaguered manufacturing town.
The tobacco commission agreed to back the for-profit medical college on the grounds that it would create jobs and add to the tax base. The city of Martinsville co-signed a performance agreement requiring that the medical college would hire 25% of its staff and generate $1.5 million in capital investment within 18 months. As of January, the 18-month mark, neither goal had been met, reports the Martinsville Bulletin.
Now the tobacco commission wants its money back, and Dr. Noel Boaz, president of the college and ICSM, its nonprofit arm, says the college doesn’t have it. The college spent the $800,000 but never achieved accreditation, and never received permanent certification from the State Council of Higher Education for Virginia. Boaz contends that the tobacco commission is wrong to demand its money back, and the Martinsville Bulletin has all the gory details.
But there is a simple lesson to be learned: Local governments have no business getting involved in business deals like this. Martinsville lacked the in-house expertise to evaluate the plans and promises of entrepreneurs like Boaz, and the city was in no position to take the financial risk. Locally backed economic development deals borne of desperation always seem to turn out badly.There are currently no comments highlighted.